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tv   Closing Bell  CNBC  November 28, 2012 3:00pm-4:00pm EST

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deny it, but nonetheless there's a newborn out there and a picture of her. her name is hashtag. what do you think? >> i guess that is a sign of the times. if it's true, i don't doubt it. that whale is on twitter. he has more followers than i do. >> by the way, you've done a fantastic job. thank you for doing jyour recovery road trip here on "street signs." >> see you in new jersey tomorrow. thank you. welcome to "the closing bell." we're at the new york stock exchange. it's as the fiscal cliff turns here on wall street yet again. we're less than an hour away from completing what could wind up being a dramatic comeback on wall street. >> it is feeling like a soap opera. i'm michelle caruso-cabrera. maria bartiromo will be back tomorrow. the dow had been down more than 100 points earlier in the session but came storming back after encouraging fiscal cliff
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talk from washington. listen. >> it's time for the president and democrats to get serious about the spending problem that our country has. but i'm optimistic that we can continue to work together to avert this crisis and sooner rather than later. >> i believe that both parties can agree on a framework that does that in the coming weeks. in fact, my hope is to get this done before christmas. >> wow. that's optimism. there you go. right now the dow jones industrial average is higher by 72 points. 12,950. the nasdaq is also in positive territory by about 11 points. the s&p 500, and you can see the same intraday pattern all three sessions, moving higher into the close. higher by 5.5 points. should investors believe in a rally solely based on encouraging comments?
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>> in today's "closing bell" exchan exchange, we discuss that. michael, i'll begin with you. the gyrations in this market are extrord their. one guy speaks in d.c., the market goes down. somebody else speaks, the market goes up. how do you play this? >> well, we're about 50% cash. i think the market is going to trend downward until they actually raise the debt ceiling and solve this so-called crisis in washington. i don't know. scott, michelle, why is this such a crisis? we're going to have about $.5 trillion in deficits in 2013. is that a crisis? for god's sake, we're finally doing something to address our debt and deficits. that should be great news. i'll tell you why gold might be down today. why is the market rallying when gold, oil, and copper are down? the only tentity borrowing all
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this money is the government. that's why gold is going down. guess what? don't worry about it. they're going to punt on this like they have every other time. >> are you as pessimistic? are they going to punt? what do you do? >> in the short-term, you have to be careful. these are unknowable things. it's a very fluid situation, as you identified. somebody gives us some happy talk. this market goes straight up. i think gold is giving perhaps a false signal there won't be qe-4. i believe there will be. it's just a matter of time. this is going to take time to implement. we're not going to put all these changes in place january 1. there's no grand bargain out there that's going to cover all these things at once. it's going to be to have phased in. it would be too much shock to the financial system. >> steve, if only the market could focus on just the economy, which actually seems to be chugging along okay. if you look at durables,
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consumer confidence, the ongoing recovery and housing, it's the overhang of the cliff that's spooking everybody. >> yeah, we've had somewhat better numbers. the new home sales today, not great. maybe sandy affected even though the government said it wasn't. the economy's okay. it may be more of a 2% plus economy in the fourth quarter than is being given credit on the street. it's not gang busters. the question has been for a long time -- by the way, there's some headlines from the beige book. you can see it really did affect the northeast, new york, and new jersey especially. so we'll see some of that in the data in the months ahead. we'll be seeing some rebuilding going on. you know, i would not make a call here on the economy, scott, to say go ahead and invest in the economy. after the fiscal cliff everything is fine. i think there's a reason for cautious optimism, but i don't think there's a reason to think it's going to go gang busters.
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>> we saw harry reid speak yesterday. the market moves when we see different comments out of washington. we saw it again today on this perception that was actually positive commentary. our bar has gotten pretty low. we see stocks move around a lot. what about interest rates? are they responding as much? >> well, perfect question. look at the chart. here's a chart of today's treasury action against the equity market. indeed, other than around 1:00 eastern after the auction, they've been correlating. stocks go up, rates go up. stocks go down, rates go down. we're trading on pr. if the premise of this exchange is should we trade on headlines, if you're a day trader who understands once you make a trade and the air is gone out of the person you trade it with, that's the only realism that is there. pr doesn't move markets more than the short term. most of the people i talk to on the automated side say these are rhythmic traders with
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algorithms. >> do you have a theory on why gold is down today? >> my theory is simple. i look at the things that have a retail or smaller investor mix as to its movement for 2012, and i think whether it's apple or whether it's gold, that what moved up nicely is going to be the piggy bank that gets cracked first before the tax man comes based on the unknowns of the fiscal cliff. >> would you buy gold here, michael? >> no, no. i'm going wait for it to wash out a little more. then i'm going add to my positions. i have a -- >> you don't weigh gold outright. >> you have to own some gold. qe-4 is coming. no doubt about it. they're already doing $40 billion per month. it's going to be $85 billion of unsterilized counterfeiting per month starting january 1. how do you abandon gold in that
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premise? >> that's exactly right. we're playing it a little bit differently. we like some of the gold-related companies. >> the miners have gotten beaten up. they got beat up much worse than the actual metals. >> there's cost and exploration you have to factor in. >> are those your best ideas? >> no, actually. i think you can still -- i'm half if cash. i think you can look for areas to enter in o short position on lockheed martin. >> defense stocks because of the fiscal cliff. >> yes, but once that gets solved, i think you have a huge rally in early 2013. then you're left with the real facts, that we're massively accumulating debt. interest rates are artificially low at 0%. >> and we've known that. >> and we're counterfeiting money like crazy. that is not the way to build an economy. i mean, come on. how sustainable is this economy?
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really? >> we got it. you're right. >> did i make my point clear? >> you never know what he's thinking. >> it's the phoney recovery. it's built on an adjustable rate mortgage. an interest rate shock. when it comes out, it's going to wipe out the solvency of this nation. >> that may be the case. everything you say may be right, but the bottom line is i want to know what the stock market is going to do as a result. the fed is printing money. they're going to print more. if you think there's going to be qe-4, why wouldn't the stock market go up? >> because blowing up the amount of base money isn't enough to get the monetary aggregates growing. you need somebody to borrow that money. the federal reserve expands the monetary base, but the government borrows that money into existence. >> all right, gentlemen. great to see you. thank you. >> hold on. >> we really appreciate it. thank you, guys. it was great to have you on. >> all right. let's find out what else is
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moving in the markets today. sharon epperson will break down the sell-off in gold we've been talking about. let's first start with bertha coombs with apple's impact. >> apple here is negative, but the draw down from apple is being offset by the likes of green mountain coffee. take a look. up nearly 28% after posting better than expected earnings and raising its outlook above estimates. costco with that special dividend, that fiscal cliff, clearly paying dividends as companies like costco issue them ahead of the year end. $7 a share there. also, r.i.m. higher today. google providing some strength. hardware sector driven by apple, dell, and seagate technology are the drag when it comes to technology overall. groupon having a big turnaround. higher in the day but even higher after its ceo came and defended himself saying, hey, folks are talking about me maybe being fired by the board. i'd be the first to fire me if things didn't work out. come back out to the board. gold stocks today started in the
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red. sharon has more on the actual gold sell-off. >> bertha, it started at the open here on floor trading. we saw gold prices drop about $20 just in the first minute. a lot of sellers going off there. a lot of traders saying that, yes, there was some technical selling here, but a lot of it was on the heels of put buying that occurred in the option market the day before. that may have been in reference to what we're seeing in the etf market. there are a lot of retail investors in gold too. as they face a possible tax hike with the fiscal cliff, they're ready take their profits. we've already seen gold prices gain about 9% so far this year. now is the the time to book profits before you can likely pay higher taxes in 2013. gold etfs, as well as the gold futures price, down sharply on the session. back to you guys. >> all right. thank you so much, sharon. we've got 49 minutes before the closing bell. the dow jones industrial average is higher by 81 points. we're at the highs of the
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session at this point. 12,959. the nasdaq is also in positive territory by 14 points. >> some of the nation's top business leaders set to meet president obama at the white house. there's a live shot of it. up next, we're joined by one ceo who says stop all the tax hike talk, we have a spending problem. that's what matters most. plus, rising above the rhetoric. we hear from one republican who says the best way to fix the debt is to cut spending and raise taxes on the rich. and later, don't look now, but the tax benefits from your 401(k) could be on the chopping block as part of a broad fiscal cliff deal. [ male announcer ] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person.
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all the fix the fiscal cliff talk seems to focus on raising taxes on only upper income earners, but that would hardly make a dent in our debt. >> ai man javers is here with a look at what could be on the
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table. >> you guys are exactly right. the political battle has been focused on these tax increases, but there are some painful spending cuts that will have to be part of this deal. ultimately, they're going to be painful politically and painful actually to the people who lose that spending. take a look at just a couple of examples here of where the knife would fall under simpson-bowles just in the year 2015, starting with drug rebates under medicare part d. that money would come from the drug companies themselves, likely $6 billion just in the year of 2015. a change in inflation measure, that means that beneficiaries of medicare and medicaid might get less money going forward. that's $3 billion. cuts in farm subsidies, that's big. those guys would lose $3 billion that year. eliminating the in-school interest subsidy for student loans. that's a popular one for those folks who have taken out student loans but who are still in school. that would be a big hit, again, to those people taking student loans. clearly, there are going to be some unpopular political choices
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here. there's a lot of stuff that's very unpopular politically already in the simpson-bowles plan, which is what a lot of people here in washington are talking about as a starting point. don't forget, there's another very difficult conversation still to come, guys. >> no doubt, eamon. thanks so much. meantime t our next guest is one of the fix the debt ceos and wants more focus on the government spending habits as well as taxes. he's fed up with frankly the whole process that's been going on. >> evan greenberg is in charge of ace limited. by the way, he's also the son of wall street legend hank greenberg of aig. joins us now exclusively. good to have you here. >> good to be here. >> what do you make of these talks in washington? do you think something is going to happen? i know you're deeply frustrated. >> well, i certainly hope so. i think any responsible leadership is going to approach this now as we need a solution, we need a framework for a solution, we need a down payment on it to avoid the fiscal cliff,
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and then after the new congress comes in, we address a compromise of long-term solutions. >> everyone seems to want to focus on the tax hikes first and talk about spending cuts later. will that work? >> no. you really have to -- we can't keep kicking the can down the road. we have to have more certainty for business. we want to get the economy going. we want to create jobs in the country. we want to preserve a prosperous united states for the next generation. i'm here speaking as an american, not simply as a ceo. if you care about your country, we have to stop kicking the can down the road and have more certainty and a framework that embraces both expense because you're going to reduce expenses by $3 for every dollar of revenue you raise if you embrace a bowles/simpson type solution. >> but that's optimistic. they're now talking one to one.
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it seems like people have even given up on that number. >> i don't believe they've given up on that number. our president during the election, he himself embraced the three to one notion and referenced bowles/simpson. i think both sides understand that. i'm not believing that there's that much irresponsibility among leadership in washington. >> let me ask you about entitlements. it's unclear at this point as to whether democrats are seriously willing to put that on the table. if you listen to harry reid, the senate majority leader, it would certainly suggest they're not. the white house itself has said it considers entitlements, social security, and otherwise as a separate issue from the fiscal cliff. house leader eric cantor speaking this morning in washington about that very issue. i want you to listen and we'll talk about it on the other side. >> we have not seen any good faith effort on the part of this
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administration to talk about the real problem that we're trying to fix. i'm told that mr. bowles, as some of us will meet with him later today, had said earlier this morning there's been no serious discussion by the white house on entitlements, on medicare and medicaid. >> is that where the conversation starts and stops to really make a dent in the deficit over the long term and the issues that we have? >> to make a dent in the deficit, i don't believe it starts and stops there, but i think there is no discussion about reducing expenses, government expenditure, without addressing social security and medicare. absolutely entitlements are on the table. we've made promises of benefits that we just cannot keep as a country over the long term. >> doesn't seem as though we're willing to deal with that issue. we're going to speak to a representative of one of the leading unions in the united states later on "the closing bell" who's going to argue that those shouldn't be on the table. how do you get people to focus
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on those issues? >> that's what washington leaders are elected to do, to lead and govern. i think that's why the private sector is speaking out this way, because this is an issue that we have to educate the public, and we have to press our leaders to address. >> we had a representative on yesterday, democratic representative. he didn't even want to talk about means testing medicare or social security. very focused on raising taxes on the rich. if you have a millionaire or billionaire elderly person, and you tell them, guess what, you're going to have to pay more for your health care, that would be like raising their taxes, right? and it would help reduce the problem. but they don't want to talk about that. >> the easiest solution's in front of us. i'm not the expert on medicare or social security. means testing and raising age limits seem to me to be pretty practical solutions as part of the solution, not the total
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solution, to reducing entitlement spending. >> if you were this the white house today with with the president as many of the nation's leading ceos are, what would be first that you would tell president obama today needs to be dealt with to get through the fiscal cliff? >> wehat we need is a solution that's going to call for sacrifice on the part of all americans. so we're going to have to raise revenue, yes. we're going to have to reduce spending. his own rhetoric, about a three to one, which is in line with the bowles/simpson framework, we need a comprehensive solution that is -- that begins there. >> mr. greenberg, thank you so much. evan, good to see you. thanks for coming on. >> thank you for having me. >> nice to see you. we have about 40 minutes to go before we close up this day on wall street. dow jones industrial average about at the highs of the day. not that far off. up 75 points. a crazy day it's been. down big then up big. all based on the rhetoric out of
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washington. >> unfortunately. green mountain coffee shares are rallying after posting blowout numbers. herb greenberg isn't buying into the hype. why he's still bearish on the stock, next. the powerball jackpot now at $550 million. no matter who wins, states are going to rake in a lot of money from ticket sales. somebody here says new york and new jersey should use those funds to rebuild their states from the devastation of superstorm sandy. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank, like no-fee atms, all over the world. free checkwriting and mobile deposits. now depositing a check is as easy as taking a picture.
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wake up and smell the profits. shares of green mountain coffee are up more than 25% today. that's after a very bullish earnings report. the stock has been brutalized in recent months. is it about time now that it's all going to turn around? on the technicals is richard ross. on the fundamentals, our own herb greenberg, who we all know is no fan of green mountain. rich, let me start with you. tell us why you're bullish on this stock. >> michelle, i love this stock here, even after today's 28% gain. we're a big buyer here. we'd look at the chart.
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we see a decisive breakout from a seven-month textbook head and shoulders bottom. we've also taken out the trend line from the september in 2011 high. also, the 200-day moving average this one foul swoop. purely on the chart alone, you have to be a big buyer. it trades $50. >> herb, what do you think? >> this is a story that's still playing out. technicals can show you all sorts of things. i get that. let's be realistic here. when you take a look at the numbers, you know, this is company that while it beat the numbers, it really didn't even beat the guidance the company sent out originally for the year back in january. you take a look at the company -- take a look at the 10-k. look at that new, very interesting risk factor they put in there. it's all about competition. talking about what will happen with its business, with its partners, the people it makes coffee for. will they go to some other supplier? >> herb, the earnings report didn't change your mind? >> this is just one quarter. this is a company why the
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quarter -- again, look, it was a good quarter on the print. let me point something else out. this was a quarter that was also goosed by rebates. this is a quarter that was energized by rebates. for the first time ever, the company had to resort to promotions. >> rich, you get the last word. >> shrinking mar zwrginmargins, competition. you just described every company ever. >> don't tell me not to look at the 10k. in the end, this is a company that is going to turn out to have a nice product that perhaps fractured market, a splintered market. it's about business model. the stock will do what it's going to do. i will tell you -- >> it's going to go higher. >> maybe it will, but you have to see where it will go longer term. >> i said rich would get the last word. sorry, you can't. herb jumped in. thanks, guys. >> we want to go to california now to john fortt who has
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breaking news regarding ncr, which is now halted on news pending. what's going on? >> yeah, scott. not exactly sure what the news is, but i've rumor they could be announcing an acquisition just after the bell. also want to know that retalix, that's an israeli company, point of sale, technology. they recently did an acquisition of a company that served high-end retail establishments nap has also been halted. ncr's market cap just shy of $4 billion. reatlix under $1 billion. still, a significant sides. it would be for ncr. we have to wait to see exactly what this news in. but in the environment of the fiscal cliff, if, indeed, what this is, it would be interesting. >> all right, john. thanks so much. >> ncr, national cash register. right? >> you like that? >> i like that because you got to change the name.
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cash registers aren't what they used to be. >> that stock is halted along with the other one john was talking about. we'll let you know when the news does come out and that stock is reop reopened for business. speaking of business, we have about 30 more minutes of business. >> top ceos set for a fiscal cliff meeting with president obama just over an hour from now. we're going to take you live to the white house next. plus, we'll hear from one democratic lawmaker willing to dive head first off the cliff if that's what it takes to reach what he thinks is a good deal on tax hikes while protecting entitlements. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong. tdd#: 1-800-345-2550 after that, it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan. tdd#: 1-800-345-2550 with the new global account from schwab, tdd#: 1-800-345-2550 i hunt down opportunities around the world tdd#: 1-800-345-2550 as if i'm right there.
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beautiful shot of the white house there as top ceos head there to discuss how to fix our nation's staggering debt with president obama. >> chief washington correspondent john harwood is also there. what is the president hoping to get from this meeting?
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>> what he's hoping to get is some air cover for the decision that he wants republicans to make and democrats for what he calls a fair and balanced plan. the ceos have sway not only because of their campaign donations but because of their role as stewards of the nation's economy, the nation's private sector. they want to avoid the fiscal cliff. so he says, help me with the politics. that's one of the reasons why we're here. it's an inside and outside game. the president spoke earlier today with middle class families to say we have to protect them from tax increases. just a few moments ago, the president had a cabinet meeting and reiterated that a deal to avoid the fiscal cliff is necessary to sustain this recovery. here's the president. >> there is no reason why taxes on middle class families should go up. it would be bad for the economy. it would be bad for those families. in fact, it would be bad for the world economy. and so i think it's very important that we get that resolved. i am very open to a fair and
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balanced approach to reduce our deficit and provide the kind of certainty that businesses and consumers need so that we can keep this recovery going. >> now, we've got one month to go before the president and congress need to solve this before either going over the cliff or getting a resolution. but that cabinet meeting was a reminder, michelle and scott, that the president also has some other decisions to make on replacing some outgoing cabinet members, including secretary of state hillary clinton and treasury secretary tim geithner. >> all right, john. >> thank you, john. i thought he was going to a sound bite. so what's it going to take to avoid the fiscal cliff? >> we have two perspectives from inside the beltway. democratic congressman peter welch, who was willing to go over the cliff to get a good deal on tax hikes while protecting entitlements, and republican congressman steve lottaret who is willing to break
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from grover norquist's tax pledge. he's also retiring at the end of this term. gentlemen, good to have both of you with us. mr. welch, i'll begin with you. i'm sure you've noticed, hopefully you've been watching cnbc and see all these pins that we are wearing that say "rise above" calling for you and your colleagues there to get something done on the fiscal cliff. why are you so unwilling to be able to do that? >> well, i am willing to do it. in fact, i work with steve, who you're going to hear from shortly, to advocate for a balanced deal. the real challenge here is practical. do we want to have a bad deal that beats the january 1 deadline, or are we willing to hold out for a more balanced deal, even if that requires us to go into january? >> does that include entitlements? does that mean reforming entitlemen entitlements, particularly medicare? >> absolutely. we have to have health care costs come under control. we can reform them. those of us who are strong supporters of medicare have to be advocates for system reform,
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not benefit cuts. >> so hand in hand with taxes, you can do them both at the same time? >> both at the same time is adeal. by the way, the pentagon has to be included in that as well. the big challenge we face is practical and time. when speaker boehner has to get specific about revenues, it's going to be a lot of anguish on the republican side. what we're going to look at on medicare is whether what we're doing is reforming the subpoena and bringing down the cost or just passing that cost off on to beneficiaries by cutting their benefits back. that's going to be tough on the democratic side. >> how about wealthy people? what about means testing medicare? you willing to do that? somebody's got $1 million in the bank. should they get medicare? >> up to a point. >> they should get medicare? >> they should get medicare, and there should be means testing. we're doing that now. so the fact is a balanced deal is the only way we're going to go forward. now, i am not advocating we go over the cliff. my preference is to get it done right away.
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but will we be able to do that when up until the election it was an over my dead body approach on both sides? now we're hearing the speaker and both sides say the right things, but the practical challenges of putting that deal together in a way that's good for the economy, good for the middle class, that's the challenge. >> congressman, what does a deal look like to you that can actually happen? every time one of you guys on the hill says something either positive or negative, the stock market and millions and millions of investors are held hostage. right now the dow jones industrial average is up 101 points because it perceives comments today from speaker boehner and president obama as being willing to get something done. yet, when you hear guys like you and your colleague there speak, it certainly doesn't come across that way. >> well, i haven't said a word yet, so i don't know how you reach that conclusion. >> i'm reading the notes that were given to me, so i know what you're going to say. >> no, you don't. peter and i were in a meeting earlier today with alan simpson
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and erskine bowles. a fair deal means everybody has some skin in the game and it's a serious proposal. that means on the revenue side, it has to be about a $6 trillion deal over ten years. you can't get there. alan simpson said, look, you can take every rich person in america, take away their island, their boat, tax everything, and you run the government for about nine months. the ugly truth and where the president has missed the boat, to this moment in time, is two-thirds of the federal budget is the middle class entitlements. you can't fix this problem without bringing the spending side to the tax side. all the talk today is about, oh, we get to -- these 2%, these 2%. it doesn't fix the problem. >> i think it's a shared sacrifice. how far are you willing to go on the tax issue? would you be willing to raise the rates, or are you only for
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getting rid of deductions? >> listen, i'm for a $5 trillion deal. but you don't get there. if you just raise the rates, you get $700 billion. you're still short $4.3 trillion. where's that going to come from? as soon as the president, you know, his proposal is $400 billion out of medicare over ten years. that's chump change. that's a rounding error. >> are you convinced that the democrats are willing to do things with medicare that would lower costs? >> they're absolutely not. peter is because he's an american. >> they're not? >> no, absolutely not. when the speaker went to the white house a year ago on the debt deal, i happened to be a good friend of his. the president was not willing to do anything. even something simple like taking the early retirement age on social security and taking it up from 62 to 64. nothing. you're not driving a 1934 car, i assume. >> senator welch, why is that? we all live longer.
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there's so much resistance. why is that? >> social security, basically a lot of us believe that should be reformed, but it should be about its own solvency, and it's not a contributor to the debt. anything we do on social security should be about -- >> okay, medicare. raise the age requirement on medicare. >> well, medicare is part of health care. we absolutely have to bring down the rate of growth in health care. medicare is affected by that. we're going up on health care costs two and three times the rate of inflation, wages, and profits. those of us who say medicare is essential are the ones that i think have to step forward to reform the system and bring those costs down. there's a lot of things that we could do that would save us money and make it more sustainable. the fact is that steve has played a very constructive role here because he's worked with democrats like me to sit down and try to find common ground. when you do that, it creates the culture of trying to get to yes. >> okay. gentlemen, thank you. it was a little more pleasant than most of the conversations we've had.
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>> depends what your definition of pleasant is, michelle. >> i've got a very low bar. >> 20 minutes to go before we close it up. dow hovering about 100 points to the plus side. nasdaq is good for 21 points. let's also note here, dow jones industrials not that far away from getting 13,000 again. the nasdaq is almost at 3,000 again. the s&p continues to hold 1400. key psychological levels. >> for sure. market rallying on optimistic talk about the fiscal cliff. does that mean stocks will surge if we actually do get a real deal? we'll have top strategists weigh in next. after the bell, we'll hear from one top union leader who says we shouldn't even be talking about spending cuts until a deal is reached on taxes. ♪ ♪ [ engine revs ] ♪
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♪ but i would do it again in a heartbeat. [ laughs ] ♪ ♪ let's go to kayla. she's got a market flash on hewlett-packard. >> michelle, we're just getting word that moody's has downgraded hewlett-packard senior debt to baa- 1. the stock is still up from its intraday move. but moody's says hp's exposure is pretty large to that, as we know. there are also some questions
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about competition in the sector. notes that $25 billion of debt will be effective. the outlook is still negative for hp. those woes are continuing. >> all right. thank you very much, kayla. carly fiorina is going to be on the show on friday. it's going to be the first time she speaks about the whole autonomy debacle at hp. >> hp, as you saw, the stock is at least getting a little bit of a bump in what otherwise has been a really, really difficult year for hewlett-packard. the autonomy thing just the latest, right? >> exactly. all right. markets are higher today after comments from house speaker boehner and president obama. we saw an instant reaction in the dow. the index reversing this morning's loss when is they sounded slightly optimistic that they would get a deal done. in fact, the market going from down over 100 points to up more than 100 points. >> let's bring in our next guests for their take on today's moves. chris, how are you supposed to navigate a market that has a
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more than 200-point range based on comments out of d.c.? >> i think you need to take a long-term viewpoint. there's volatility in the market. you don't overreact to these big moves. you begin to find companies. do your homework. there are growth opportunities out there with good management teams. stick to your principles on investing. >> rick, do you agree? invest right through it? should we not worry about the fiscal cliff? >> i think you need to worry about it a little bit. keep in mind, you can't trust what comes out of these politicians' mouths. they're talking to their constituents. they're talking to their political party and negotiating. they're in the middle of an important negotiation and sticking out their position. i don't think what they say today is where they plan to end up. >> so trading based on comments day to day, a mistake. >> that's silly, absolutely. >> cli >> chris, if you think the market could pull back, are you
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snapping up some items on your shopping list? >> you can sell companies you may not want. one company we love is express scripts. it's had a big correction the last six weeks. the long-term growth for the secular growth it has is still a great story. >> bob, what are you hearing from investors? are they using the opportunities to sell off, buy into the dips because you have to invest through the fiscal cliff here? >> yeah, there's two aspects of this fiscal cliff deal that have to happen. number one, it's got to be soon, meaning december. that's why markets went up when the president said i want a deal hopefully by christmas. secondly, it's got to be substantial. the different ideas of what substantial is. some combination of revenue raises and spending cuts that's maybe $ 100 billion at least. if that doesn't happen, the
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bears will come out saying we're going to get debt downgrades in the next few months. that's why the substantial part becomes important. >> there's a report safing we're far more likely to get an announcement about qe-4 in mid-december. a lot of people assumed that was the case. how good would that be for stocks? >> i think it's baked into the market right now. we know the fed is going to be easy for a long time. there's no real threat of inflation. unemployment is still high enough. they're going to be easy. i disagree with the last guest about the need for something before the end of the year on the fiscal cliff. i don't think we're going to see anything the first of the year. the politicians have a couple reasons to wait. one of which is they get to vote for a tax decrease if they wait until the first of the lowered your taxes. >> chris, just a quick comment
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on report michelle was talking about. does it change your view on the stock market if in a few weeks the fed enacts qe-4? >> i don't think so. we're longer-term investors looking for a good opportunity. companies trading book value, cash levels. that's when you buy these for three years. >> all right, guys. thanks. >> can i make a quick comment? there was a lot of concern we get 1.3%, 1.5% gdp growth. easily you could slip into recession in 2013, particularly if we go over the fiscal cliff. that's why a lot of people believe qe-4 is coming. they'll do some kind of open-ended thing. >> it's baked in the cake. that would also explain why we've only gotten about 15 points out of the report, which isn't much. >> i think it's only fair if we say it's somewhat of an inexact science in getting the timing right of when the fed may do something. whether they're thinking about qe-4, sure. whether they do it in two weeks,
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who knows. >> ten minutes before the closing bell. the dow jones industrial at the highs of the session. higher by 104 points. >> stocks are rallying on a renewed hope for a fiscal cliff fix. perhaps on the fed as well. the day sure didn't start pretty. that's coming up. you better start saving big time. why your retirement could be at risk courtesy of a possible fiscal cliff deal. that's later on "the closing bell."
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some breaking news on the volcker rule. >> well, scott, regulatory sources have told cnbc that the deadline to complete the volcker rule is now delayed to the first quarter of next year. previously, regulators aimed for a final draft at the end of this year. that rule places limits on a bank's trading capabilities. the financial sector has been watching this development closely, ever since dodd/frank was passed 2 1/2 years ago. a hearing is scheduled in front of the house financial services committee, officials say, for more feedback on volcker. this time coming from corporate treasurers and smaller banks. still a developing story. tomorrow, don't miss volcker himself on cnbc in an interview airing on "squawk box." for now, that rule pushed out at least into q-1 next year.
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>> that's not surprising. it was going to be so difficult to implement. for anybody who doesn't know what the volcker rule is, basically banks aren't allowed to have hedge funds within them to generate profits because it's perceived to be too risky. it whether huill hurt profit waa lot of banks. it's hard to know if you're doing a trade for a customer, for yourself. accounting-wise, it doesn't really look all that different to a regulator. >> michelle, you talk about a hedge fund within a bank. the question now is, is this going to be regulated to a point where banks can't even carry out the most basic functions on behalf of clients like interest rate hedging, which corporations small to large all do. it's not just the banks. they're afraid the language here could compromise some of that liquidity. >> i'm also looking at the performance of the banks right now. you already have a sizable gain in many of these financials. perhaps you get a little bit of
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an addition to that. kayla, thank you. you know what's next? >> what? >> the countdown. >> the final countdown. the closing countdown. after the bell, student loan threatening to top $1 trillion. student loan delinquency on the rise. guess who's on the hook if they default? you, me, taxpayers. is there another massive bailout coming there? that and more later on "the closing bell". can i help you? i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground shipping at fedex office. why use temporary treatments when you can prevent the acid that's causing it with prevacid24hr. with one pill prevacid24hr works at the source to prevent the acid that causes frequent heartburn all day and all night. and with new prevacid24hr perks,
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welcome back to the floor of the new york stock exchange. time for the closing countdown. back with chris and allen. dow is up 107 points. how is this for a stat? down 100 on the dow, up 100 on the dow. the last time that happened was more than a year ago, october 2011. allen, how are you trading this market down here when you have such wild gyrations based on d.c.? >> you have to play close. buy a put, buy a call. that's all that's going to happen until you get this thing resolved. you're going to see this volatility. today, a little positive news out of congress and the white house. right back up. it's going to trade on talk. >> trading somewhat on this report, perhaps, that the fed
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could initiate more had stimulus, so-called quantitative easing, the fourth round of it in a couple weeks. dow is up 110. highs of the day. i mean, is that affecting how you view the market? >> look, i think i'd be more affected if i began to see companies talking about layoffs. as long as people are being employed and companies are doing well, i think we'll get through this fiscal cliff and companies will be at a good investment point. >> allen, clearly the market can go higher without a resolution to the cliff. it's doing it as we're standing here talking. how long can that continue? as long as the market believes something is coming, suspeisn't good enough? >> that's pretty good. we still need a resolution. we need certainty. there's about $2 trillion in corporate money on sideline waiting to get involved. until they get some kind of certainty, i don't think they'll jump in. right now you're seeing people jump in. you get a real resolution, you have a market flood. >> all right. good to


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